Obama's Key States Are Among the Hardest Hit by Recession

As the president embarks on a difficult re-election bid in 2012, the lagging economy will hurt him even worse in the places that count

New census data show that the Great Recession and its aftermath have battered virtually every state in the nation--and that some of the heaviest blows have landed on states that may loom the largest in the 2012 presidential election.

Figures from the U.S. Census Bureau's annual American Community Survey, released in late September, reveal not only how deeply but also how broadly the economic downturn has scarred the nation. The new numbers on income, poverty, and access to health insurance capture how the past two years have both deepened the distress of metal-bending states such as Michigan and Ohio (which have long struggled with the decline of traditional manufacturing) and humbled many of the past decade's highest fliers (Arizona, Nevada, Georgia, and Florida) where growth had long fed on itself in what looked like a cycle of perpetual prosperity.

Indeed, the starkest message may be that, with the partial exception of a few energy producers, practically no state has avoided serious pain. Median family income has declined in every state except North Dakota since 2008. "Everyone is under some type of water at this point," says Chris Christopher, a senior principal economist for the consulting firm IHS Global Insight.

It puts "into play states that he didn't expect to have to defend." —Republican pollster Glen Bolger

But while virtually all states have lost ground since 2008, a National Journal analysis of the census survey found that many of the swing states likely to decide the 2012 election have suffered the heaviest losses. The nine states that switched from voting for George W. Bush in 2004 to Barack Obama in 2008 experienced a greater decline in their median family income than did the nation overall. It's the same story in the partially overlapping list of 14 states in which Obama attracted between 45 and 55 percent of the vote last time. Both groups, according to separate employment figures from the Bureau of Labor Statistics, have also lost a higher percentage of their jobs since 2008 than the nation overall.

That's because the economic crisis did much of its deepest damage in the Rust Belt, which includes many of American politics' traditional battlegrounds, and in the Sun Belt, which contains many of the newly emerging swing states. This concentration compounds President Obama's political challenge as he works to assemble a 270-vote Electoral College majority. "It will force him to play defense and put into play states that he didn't expect to have to defend," Republican pollster Glen Bolger says.

The president still has some time for the economy to show more signs of life--and a potential case to make even if it doesn't. Across the country, the pain under Obama's watch is a continuation of the crisis that began late in George W. Bush's presidency. But, even so, the census results suggest that in essentially no state could the president feel safe asking voters the question that Ronald Reagan made famous: Are you better off than you were four years ago?

A CONTINENT-SIZED STORM

The census numbers portray the Great Recession and its grueling aftermath as a storm that has stretched from coast to coast and border to border. On every key measure, the damage has been not only deep but also broad. "The whole private economy has been hammered, really," says Mark Muro, a senior fellow and the director of policy at the Brookings Institution's Metropolitan Policy Program.

National Journal analyzed the American Community Survey data to assess the economic trajectory of the states during Obama's presidency. The annual ACS reports on about 3 million households and provides the most detailed data on economic and social conditions below the national level. In each case, NJ compared the findings for 2010, the latest available, to the results from 2008, the Bush administration's last year. To complete the picture, National Journal also used data from the Bureau of Labor Statistics and the Federal Housing Finance Agency to track the trajectory of state-level trends in employment and housing prices from 2008 until now.

No state avoided losses on at least one of the three major census measures that NJ analyzed: median family income, poverty, and access to health insurance. The pictures on income and poverty are especially sobering. From 2008 through 2010, the median family income, measured in inflation-adjusted dollars, declined in every state except North Dakota, which enjoyed a 5 percent increase thanks to an oil and natural-gas boom.

Twenty states saw their median family incomes plummet at least a dizzying 5 percent over those two years. The largest losses were clustered in the twin poles of Sun Belt and Rust Belt states: on the one hand, Arizona, Georgia, Florida, Nevada, Alabama, North Carolina, California, and South Carolina; on the other, Michigan, Indiana, and Ohio. (Oregon was the only state among the dozen largest losers that is not in either the Sun Belt or the Rust Belt.) A more diverse list of 17 other states lost between 3 and 5 percent of median family income.